viacom pdf

Document Sample
viacom pdf Powered By Docstoc
					February 12, 2009

2008 RESULTS

Cautionary Statement Concerning Forward-Looking Statements
This presentation contains both historical and forward-looking statements. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements reflect the Company’s current expectations concerning future results, objectives, plans and goals, and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause actual results, performance or achievements to differ. These risks, uncertainties and other factors include, among others: the continuation or worsening of current economic conditions generally, and in advertising markets in particular; the public acceptance of the Company’s programs, motion pictures and games; competition for audiences and distribution; technological developments and their effect in the Company’s markets and on consumer behavior; fluctuations in the Company’s results due to the timing, mix and availability of the Company’s motion pictures and games; changes in the Federal communications laws and regulations; the impact of piracy; other domestic and global economic, business, competitive and/or regulatory factors affecting the Company’s businesses generally; and other factors described in the Company’s news releases and filings with the Securities and Exchange Commission, including its 2008 Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. The forward-looking statements included in this presentation are made only as of the date of this presentation, and the Company does not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. Reconciliations for any non-GAAP financial information contained in this presentation are included in this presentation or found on the Company’s website at www.viacom.com.

This presentation is a supplement to, and should be read in conjunction with, Viacom’s earnings release for the fourth quarter and year ended December 31, 2008.

2

Reported Results
($ In Millions, except per share amounts)

4th Quarter 2008 B/(W) 2007 Revenues Expenses Equity Compensation D&A Operating Income Net Earnings, Continuing Operations Diluted EPS, Continuing Operations Weighted Average Diluted Shares $ 4,243 (3,615) (29) (124) 475 172 0.28 611.5 (15%) (32%) (29%) (51%) (68%) (66%) 6%

Full Year 2008 B/(W) 2007 $14,625 (11,598) (99) (405) 2,523 1,233 1.97 625.4 9% (16%) (15%) (3%) (14%) (24%) (18%) 7%

3

2008 Restructuring and Other Charges
($ In Millions)

Media Networks

Filmed Entertainment

By Segment
Corporate Total

Severance and Lease Termination Costs Programming and Film Inventory Asset Impairments and Other Total

$

71 286 32

$

29 19 14

$

3 -

$

103 305 46

$

389

$

62

$

3

$

454

Operating

By Expense Line Item
SG&A D&A

Total

Severance and Lease Termination Costs Programming and Film Inventory Asset Impairments and Other Total

$

305 14

$

94 -

$

9 32

$

103 305 46

$

319

$

94

$

41

$

454
4

Adjusted Results
($ In Millions, except per share amounts)

4th Quarter 2008 (1) B/(W) 2007(2) Revenues Adjusted Expenses Adjusted Equity Compensation Adjusted D&A Adjusted Operating Income Adjusted Net Earnings, Continuing Operations Adjusted Diluted EPS, Continuing Operations Weighted Average Diluted Shares $ 4,243 (3,204) (27) (83) 929 464 0.76 611.5 (2%) (23%) 14% (6%) (16%) (10%) 6%

Full Year 2008 (1) B/(W) 2007(2) $14,625 (11,187) (97) (364) 2,977 1,491 2.38 625.4 9% (13%) (13%) 7% (1%) (6%) 1% 7%

See page 6 for footnotes and pages 18 - 23 for a reconciliation to GAAP results.

5

Footnotes
1. 2008 adjusted results for the three months ended December 31, 2008 exclude $454 million of pre-tax restructuring and other charges ($411 million in expenses, $2 million in equity compensation and $41 million in D&A), principally related to programming abandonments, severance, the write-down of film inventory and other charges ($286 million after-tax, $0.47 per share); $15 million of pre-tax non-cash investment impairments ($15 million after-tax, $0.02 per share); and $9 million of discrete tax benefits ($0.01 per share). The discrete tax benefits were principally the result of effectively settled audits. 2008 adjusted results for the year ended December 31, 2008 exclude the restructuring and other charges discussed above; $27 million of pre-tax non-cash investment impairment ($27 million after-tax, $0.04 per share); and $55 million of discrete tax benefits ($0.09 per share). 2. 2007 adjusted results for the three months ended December 31, 2007 exclude $7 million of pretax expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations ($5 million after-tax, $0.01 per share). 2007 adjusted results for the year ended December 31, 2007 exclude $77 million of pre-tax expenses related to the Media Networks restructuring charges ($49 million after-tax, $0.07 per share); a $151 million pre-tax gain on the sale of equity investment ($95 million after-tax, $0.14 per share); a $36 million non-cash pre-tax investment impairment ($23 million after-tax, $0.04 per share); and $15 million of net discrete tax benefits ($0.02 per share).

6

Free Cash Flow
($ In Millions)

4th Quarter 2008 B/(W) 2007 $ 475 447 83 (53) (209) (97) 717 $ 1,363 (51%) n/m (14%) 40% (9%) 60% n/m 95% n/m 133%

Full Year 2008 B/(W) 2007 $ 2,523 447 364 (288) (495) (741) (62) $ 1,748 $ 1,748 (14%) n/m (7%) (22%) (6%) (12%) 78% 3% n/m 14%

Operating Income Restructuring (1) Depreciation & Amortization Capital Expenditures Cash Interest Cash Taxes (2) Working Capital & Other Cash Taxes on Disposition (3) Free Cash Flow (4)

Operating Free Cash Flow (4) $ 1,363

1) Cash paid as of 12/31/08 was $7 million of the total 2008 restructuring charge of $454 million; Cash paid as of 12/31/07 was $54 million for FY’07 and $10 million for Q4’07 of the restructuring charges of $77 million and $7 million, respectively. 2) Excludes taxes paid with respect to the dispositions of assets in 2007. 3) For comparison purposes, 2007 operating free cash flow excludes cash taxes paid with respect to the gain recognized in 2Q’07 on the sale of the Company’s non-controlling investment in MTV Russia and gain recognized in 3Q’07 on the sale of Famous Music. It is important to note that the net cash proceeds from asset sales is not included in Free Cash Flow. See Page 24 for more information. 4) See Page 24 for the definition and reconciliation of free cash flow and operating free cash flow to net cash flow from operations. Note: n/m – not meaningful

7

Debt & Cash
($ In Millions)

December 31, 2008 Bank Debt Floating Rate Senior Notes due 2009 Total Floating Rate Debt 5.75% Senior Notes due 2011 6.25% Senior Notes due 2016 6.125% Senior Notes due 2017 6.875% Senior Debentures due 2036 6.75% Senior Debentures due 2037 6.85% Senior Notes due 2055 Note Payable Capital Leases and Other Total Fixed Rate Debt Total Debt Cash & Cash Equivalents Net Debt $ 650 750 1,400 1,496 1,495 497 1,734 248 750 136 246 6,602 $ 8,002 $792 $ 7,210

8

Available Capacity and Long-Term Debt Maturities
($ In Millions)

$4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2008 2009 2010 2011 2016 2017 2036 2037 2055
Note: 2008 column denotes combined cash & cash equivalents of $792 million and credit facility availability of $2.6 billion. Chart excludes note payable, capital leases and other obligations. Bank debt in above chart refers to revolving bank credit facility that matures on 12/31/10. Assumes outstanding credit facility balance of $650 million at year end 2008 is paid at maturity.

$3,400
$800 $2,600

Bank Debt undrawn (expires 2010) Cash & Cash Equivalents Public Debt Bank Debt drawn

$1,500 $750 $650

$1,500

$1,750

$500

$750 $250

9

Share Repurchase Program
(In Millions)

4Q 2008 Cost of Repurchase Shares Repurchased Year End Shares Outstanding $148 8.5

Year Ended 12/31/2008 $1,223 38.7 606.8

Remaining program availability as of 12/31/08 is $1.3 billion

10

SEGMENT HIGHLIGHTS

Media Networks – Revenues by Type
($ In Millions)

4th Quarter 2008 B/(W) 2007 Advertising Affiliate Ancillary Total $ 1,346 667 462 $ 2,475 (3%) 12% 1%

Full Year 2008 B/(W) 2007 $ 4,722 2,620 1,414 $ 8,756 1% 12% 32% 8%

12

Media Networks – Financial Results
($ In Millions)

4th Quarter 2008 B/(W) 2007 Revenues Expenses Equity Compensation D&A Operating Income, Before Adjusted Items Adjusted Items (1) Operating Income $ $ 2,475 (1,517) (12) (48) 898 (389) 509 1% (5%) (20%) 24% (3%) n/m (44%)

Full Year 2008 B/(W) 2007 $ 8,756 (5,362) (40) (236) 3,118 (389) $ 2,729 8% (15%) (8%) 14% n/m (10%)

1) 2008 results include $389 million of restructuring and other charges ($351 million in expenses and $38 million in D&A) for the quarter and full year ended December 31, 2008. 2007 results include $7 million and $77 million, respectively, of expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations for the quarter and year ended December 31, 2007. Note: n/m – not meaningful 13

Filmed Entertainment – Revenues by Type
($ In Millions)

4th Quarter 2008 B/(W) 2007 Theatrical Home Entertainment TV License Fees Ancillary Total $ 350 1,020 351 86 $ 1,807 28% (6%) (13%) 9% (2%)

Full Year 2008 B/(W) 2007 $ 1,714 2,724 1,333 262 $ 6,033 17% 9% 3% 17% 10%

14

Filmed Entertainment – Theatrical Releases
4Q 2008 Madagascar 2: Escape to Africa (DWA) The Curious Case of Benjamin Button Revolutionary Road Defiance 4Q 2007 The Heartbreak Kid Things We Lost in the Fire Bee Movie (DWA) Beowolf Margot at the Wedding Kite Runner Sweeney Todd There Will Be Blood No Country For Old Men

15

Filmed Entertainment – Financial Results
($ In Millions)

4th Quarter 2008 B/(W) 2007 Revenues Expenses Equity Compensation D&A Operating Income, Before Adjusted Items Adjusted Items (1) Operating Income $ $ 1,807 (1,689) (4) (30) 84 (62) 22 (2%) (11%) (28%) n/m (81%) $

Full Year 2008 B/(W) 2007 $ 6,033 (5,823) (14) (108) 88 (62) 26 10% (11%) (27%) (9%) (15%) n/m (75%)

1) 2008 results include $62 million of restructuring and other charges ($60 million in expenses and $2 million in equity compensation) for the quarter and full year ended December 31, 2008. Note: n/m – not meaningful

16

APPENDIX RECONCILIATIONS

Supplemental Disclosures: Non-GAAP Financial Information

Non-GAAP measures, including free cash flow, operating free cash flow and adjusted results that exclude restructuring and other charges, non-operating investment gains and losses, discrete taxes and impairment charges, where applicable, are relevant and useful information for investors because they improve their ability to understand the Company's operating performance, make it easier to compare the Company's results with other companies and allow investors to view performance in a manner similar to the method used by the Company's management. These measures are not calculated in accordance with GAAP. They should not be considered in isolation of, or as a substitute for, net cash flow from operations, operating income, net earnings from continuing operations and diluted EPS from continuing operations as indicators of operating performance. Such non-GAAP measures, as calculated by the Company, may not be comparable to similarly titled measures employed by other companies.

18

Supplemental Disclosures: Non-GAAP Financial Information
($ In Millions, except per share amounts)

Quarter Ended December 31, 2008
Pre-tax Operating Income Earnings from Continuing Operations(1) Net Earnings from Continuing Operations(2) Diluted EPS from Continuing Operations

Reported Results Adjustments: Restructuring and Other Charges (3) Impairment of Investments (5) Discrete Tax Benefits (6) Adjusted Results

$

475

$

256

$

172

$

0.28

454 $ 929 $

454 15 725 $

286 15 (9) 464 $

0.47 0.02 (0.01) 0.76

See Page 23 for footnotes.

19

Supplemental Disclosures: Non-GAAP Financial Information
($ In Millions, except per share amounts)

Year Ended December 31, 2008
Pre-tax Operating Income Earnings from Continuing Operations(1) Net Earnings from Continuing Operations(2) Diluted EPS from Continuing Operations

Reported Results Adjustments: Restructuring and Other Charges (3) Impairment of Investments (5) Discrete Tax Benefits (6) Adjusted Results

$

2,523

$

1,855

$

1,233

$

1.97

454 $ 2,977 $

454 27 2,336 $

286 27 (55) 1,491 $

0.46 0.04 (0.09) 2.38

See Page 23 for footnotes.

20

Supplemental Disclosures: Non-GAAP Financial Information
($ In Millions, except per share amounts)

Quarter ended December 31, 2007
Pre-tax Operating Income Earnings from Continuing Operations(1) Net Earnings from Continuing Operations
(2)

Diluted EPS from Continuing Operations

Reported Results Adjustments: Media Networks Restructuring Activities (3) Adjusted Results

$

978

$

851

$

545

$

0.83

7 $ 985 $

7 858 $

5 550 $

0.01 0.84

See Page 23 for footnotes.

21

Supplemental Disclosures: Non-GAAP Financial Information
($ In Millions, except per share amounts)

Year Ended December 31, 2007
Pre-tax Operating Income Earnings from Continuing Operations(1) Net Earnings from Continuing Operations
(2)

Diluted EPS from Continuing Operations

Reported Results Adjustments: Media Networks Restructuring Activities (3) Gain on Sale of Equity Investment (4) Impairment of Investment (5) Discrete Tax Benefits (6) Adjusted Results

$

2,936

$

2,580

$

1,630

$

2.41

77 $ 3,013 $

77 (151) 36 2,542 $

49 (95) 23 (15) 1,592 $

0.07 (0.14) 0.04 (0.02) 2.36

See Page 23 for footnotes.

22

Footnotes – Pages 19 - 22
1. 2. 3. Pre-tax earnings represent earnings from continuing operations before provision for income taxes and minority interest. The tax impact of adjustments has been calculated where appropriate using the applicable rates in effect for the period presented. 2008 adjusted results exclude $454 million for the quarter and year ended December 31, 2008, of restructuring and other charges across all segments. The charge principally relates to programming abandonments, severance, the write-down of film inventory and other charges. 2007 adjusted results exclude $7 million and $77 million, respectively, of expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations for the quarter and year ended December 31, 2007. In 2007, the Company sold its non-controlling investment in MTV Russia for $191 million and recognized a pre-tax gain of $151 million. 2008 adjusted results exclude $15 million and $27 million, respectively, of pre-tax non-cash investment impairment charges for the quarter and year ended December 31, 2008. 2007 adjusted results exclude $36 million of pre-tax non-cash investment impairment charges for the year ended December 31, 2007. 2008 adjusted results exclude $9 million and $55 million, respectively, of net discrete tax benefits for the quarter and year ended December 31, 2008. 2007 adjusted results exclude $15 million of net discrete tax benefits for the year ended December 31, 2007. The discrete tax benefits were principally the result of effectively settled audits.
23

4. 5.

6.

Supplemental Disclosures: Non-GAAP Financial Information
($ In Millions)

4th Quarter 2008 2007 Cash Provided By Operations Capital Expenditures Free Cash Flow (1) Cash Taxes on Disposition (2) Operating Free Cash Flow (3) $ 1,416 (53) $ 1,363 $ 1,363 $ $ $ 673 (89) 584 115 699

Full Year 2008 2007 $ 2,036 (288) $ 1,748 $ 1,748 $ 1,776 (237) $ 1,539 163 $ 1,702

1) The Company defines free cash flow as cash provided by operations minus capital expenditures. Free cash flow is a non-GAAP measure. Management believes free cash flow provides investors with an important perspective on the Company’s liquidity, including ability to service debt, make strategic acquisitions and investments, and repurchase stock. 2) For comparison purposes, 2007 operating free cash flow excluded cash taxes paid with respect to the gain recognized in 2Q’07 on the sale of the Company’s non-controlling investment in MTV Russia and gain recognized in 3Q’07 on the sale of Famous Music. It is important to note that the net cash proceeds from asset sales is not included in Free Cash Flow. 3) The Company defines operating free cash flow as cash provided by operations minus capital expenditures plus cash taxes on dispositions. Operating free cash flow is a non-GAAP measure. Management believes operating free cash flow provides investors with an important perspective on the Company’s liquidity from ongoing activities.

24


				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:5864
posted:2/12/2009
language:English
pages:25